Reuters reports that Davies was a surprise appointment to succeed Philip Hampton as chairman of state-controlled RBS after the Financial Services Authority (FSA) he set up in the 1990s was widely criticised for inadequate supervision of banks in the run-up to the 2007-9 financial crisis. The FSA was subsequently disbanded.
Davies told the news agency that the FSA was not a 'light-touch' regulator and was not to blame for the failure of banks such as RBS, which cost taxpayers $67bn to rescue.
'The big problem during the crisis was that banks didn't have enough capital. It had nothing to do with light-touch regulation', he said in an interview on Monday.
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